CoTisol\da+io  Ti  0^  CIS  coTn-ya'n\es 

a.-nd  eXeG^Tic  '-''5'^+  co-m-patues. 


o 


CONSOLIDATION 


ELECTRIC  LIGHT - COMPANIES 


ARGUMENT  OF 
LOUIS  D.  BRANDEIS 


ON  BEHALF  OF 


rir- 


THE  MASSACHUSETTS  STATE  BOARD  OF  TRADE 


BEFORE  THE 

LEGISLATIVE  COMMITTEE  ON  PUBLIC  LIGHTING 


March  p, 


Issued  by  the  Public  Franchise  League,  60  State  Street,  Boston,  1905 


Boston 

Geo.  IJ.  Ellis  Co.,  Printers,  272  Congress  Street 

1905 


• • • 


CONSOLIDATION  OF  GAS  ^GQMFANiES  AND  OF 
ELECTRIC  LIGh¥”-COM 


Argument  of  Louis  Dt  Brandeis. 


March  9,  1905. 

Mr.  Chairman j — The  Massachusetts  State  Board  of  Trade 
has  petitioned  the  Legislature  for  the  enactment  of  a general 
law  providing  for  the  consolidation  of  gas  companies  and  of 
electric  lighting  companies  with  a prohibition  against  stock- 
watering. 

The  Massachusetts  State  Board  of  Trade  has  not  been  rep- 
resented at  any  of  the  hearings  before  the  Board  of  Gas  and 
Electric  Light  Commissioners,  or  before  this  Committee  relat- 
ing specifically  to  the  Boston  Gas  Companies.  It  is  not  here  to 
attack  or  to  defend  the  action  of  any  of  these  companies  or  of 
- those  who  have  been,  or  who  now  are,  in  control  of  the  compa- 
nies. With  the  specific  questions  arising  in  connection  with 
those  companies  the  Board  of  Trade  has  no  concern  excepting 
^ only  this:  that  any  consolidation  which  may  take  place  shall 
be  in  accordance  with  the  wise  and  established  policy  of  the 
Commonwealth  prohibiting  stock-watering  of  quasi-public  corpo- 
rations ; and  that,  to  accomplish  this  end,  a general  law  shall  be 
enacted  under  which  any  gas  or  electric  light  companies  may  be 
consolidated. 

The  policy  of  prohibiting  stock-watering  is  wise,  and  is  the 
established  policy  of  Massachusetts. 


Anti-Stock  Watering  Policy  Wise. 

It  is  wise  because  it  rests  upon  justice,  the  only  stable  founda- 
tion among  a free  people.  It  is  just  because  it  gives  full  rec- 
ognition to  the  rights  both  of  capital  and  of  the  public.  It 
recognizes  that  those  who  invest  their  money  in  public  service 


^2.11  5?) 


3 3S.& 

"S'  7 c 3c.. 

2 

corporations*  anv». entitled  not  only  to  a fair  return  on  the  capi- 
tal, but  also*  to*  ip. excess  of  that  fair  return  commen- 

surate wj:lh.^hed3k[*aSsUftjed*  It  recognizes,  on  the  other  hand, 
that  tho*se**who  *^H§ago  ip;  a ^business  which  involves  the  use  of 
public  p^o^^.tyv.kken^erptj’^ti,  undertake  as  trustees  to  per- 
form a pubfto’ ^^AnoeJ/S^d  that  they  must  be  held  accountable 
for  their  action  as  *trus*t^s.  In  entering  upon  such  business 
or  in  investing  money  in  such  business,  every  person  assumes, 
so  far  as  he  is  concerned,  the  obligation  to  perform  through  the 
company  the  duty  of  furnishing  to  the  public  adequate  facil- 
ities for  a reasonable  compensation. 

The  law  against  stock-watering  rests  upon  the  fact  that,  in 
order  to  determine  what  a reasonable  compensation  is  and  to 
limit  the  return  on  capital  to  a reasonable  compensation,  it 
is  essential  that  there  should  be  before  the  public  a knowledge 
of  the  capital  originally  invested  in  the  enterprise.  The  devi- 
ous devices  of  stock- watering  have  the  inevitable  effect  of  con- 
cealing that  fact  from  the  public,  and  by  virtue  of  that  conceal- 
ment tempt  the  owners  of  the  property  to  make  unreasonable 
exactions  from  the  public. 


Anti-Stock  Watering  Policy  Well  Established. 

The  policy  of  prohibiting  stock-watering  is  also  well  established. 

In  1894  it  became  the  general  law  of  the  Commonwealth;  but 
long  before  that  date  its  importance  was  fully  recognized,  and 
recognized  fully  also  in  the  administration  of  the  gas  and  elec- 
tric lighting  business. 

The  only  general  law  which  exists  in  Massachusetts  relating 
to  the  consolidation  of  gas  or  of  electric  lighting  companies  is 
the  Act  of  1887,  which  authorized  gas  companies  in  any  city 
or  town  to  engage  also  in  the  business  of  electric  lighting,  if,  in 
the  opinion  of  the  Board  of  Gas  and  Electric  Light  Commission- 
ers, such  action  was  for  the  best  interests  of  the  public.  In 
applying  the  provisions  of  the  act,  the  Board  has  always  in- 
quired whether  the  consolidation  would  result  in  an  increase 


o 


3 

or  a docrease  of  capitalization  or  of  dividend  charges,’  and  its 
action  in  granting  or  withholding  its  approval  has  been  in  large 
measure  determined  by  that  fact. 

The  Board  of  Gas  and  Electric  Light  Commissioners  showed 
almost  from  the  organization  of  the  Commission  the  extent  to 
which  it  and  the  community  deemed  the  limitation  of  capital 
an  essential  element  in  protecting  the  rights  of  the  consumers. 

(a.)  The  Amherst  Consolidation. 

In  1890,  in  the  case  of  the  Amherst  Gas  Company,  where  there 
was  a capital  of  S10,000,  but  the  value  of  the  property  of  the 
company  was  $15,000,  the  $5,000  surplus  having  been  accumu- 
lated in  the  course  of  busines,  the  Commission  required  the 
recall  of.  an  issue  of  $5,000  of  stock  to  represent  that  surplus,, 
because,  as  it  said, — 

“ It  appeared  ample  dividends  had  been  paid  stockholders,  and 
therefore  the  consumers  are  entitled  to  share  in  this  surplus.’' 

(5.)  The  North  Adams  Consolidation. 

In  a case  arising  in  1891,  where  the  North  Adams  Gas  Com- 
pany applied  for  permission  to  purchase  and  carry  on  the 
electric  lighting  business  then  conducted  by  the  Adams  Electric 
Light  & Power  Company,  permission  was  granted  because  it 
involved  a wiping  out  of  the  capital  of  the  Electric  Light  & 
Power  Company  and  the  application  of  the  surplus  of  the  Gas 
Company  of  $19,000  to  the  purchase  of  the  electric  light  plants, 
the  Commissioners  saying,  among  other  things: — 

The  reduction  of  capital  by  the  consolidation  was  given 
and  considered  as  a substantial  reason  why  the  Gas  Company 
could  produce  electric  light  more  cheaply  than  could  a sepa- 
rate electric  company.” 

(c.)  The  Easthampton  Consolidation. 

In  1892,  when  the  Easthampton  Gas  Company  granted  the  right 
to  buy  out  the  electric  lighting  business  of  the  People’s  Com- 


4 


pany  in  that  town,  the  Commission  stated  it  was  “well  aware 
that  an  undue  enlargement  of  capital  in  such  cases  is  likely 
to  obstruct  the  benefits  which  otherwise  might  result  from  a 
union  of  companies.”  The  Board  intimated  that  its  action 
would  depend  in  some  degree  upon  the  amount  of  capital  pro- 
posed; and,  when  the  directors  of  the  Gas  Company  decided  that 
they  would  not  increase  their  capital  at  all,  the  Board  con- 
sented to  the  consolidation. 

In  each  of  these  early  cases  the  consolidation  was  deemed 
consistent  with  public  interest,  since  it  did  not  involve  any 
increased  capitalization  or  dividend-burdens  upon  the  com- 
munity. 

(d.)  The  proposed  Worcester  Consolidation. 

The  denial  in  1890  of  the  petition  of  the  Worcester  Gas 
Light  Company  to  consolidate  with  the  Electric  Light  Com- 
pany presents  a striking  application  by  the  Board  of  the 
same  principle.  The  Gas  Company  had  a capital  of  S500,- 
000,  upon  which  it  was  paying  dividends  at  the  rate  of  8 per 
cent.  The  Electric  Light  Company  had  a capital  upon  which 
it  was  paying  dividends  at  the  rate  of  5 per  cent.  It  was  pro- 
posed to  issue  only  $200,000  additional  stock  of  the  Gas  Com- 
pany to  take  the  place  of  a like  amount  of  the  Electric  Light 
Company  stock.  But  the  Commissioners  foresaw  that  the 
Gas  Company  would  not  reduce  the  dividend  from  8 per  cent, 
to  7 per  cent,  or  6 per  cent.,  but  would  pay  8 per  cent,  on  the 
new  stock  as  well  as  upon  their  old  stock;  and  so  the  Com- 
missioners, after  a full  investigation  of  the  facts,  thought  that 
the  public  interest  would  not  be  advanced  by  that  consolida- 
tion, among  other  reasons  because  an  increase  of  the  dividend 
charges  upon  capital  would  necessarily  result  in  an  increase  of 
the  charges  upon  the  public,  saying  : — 

“Probably  the  stockholders  in  the  Gas  Company  do  not  ex- 
pect to  receive  reduced  dividends  in  consequence  of  the  con- 
solidation. But,  with  no  facilities  for  reducing  the  cost  of  elec- 
tric light,  how  can  this  rate  be  maintained  on  the  enlarged  capi- 


5 


tal?  Apparently,  either  by  advancing  the  prices  or  lessening 
the  service  or  by  using  the  surplus  profits  of  the  Gas  Company. 
Either  course  is  obviously  against  the  public  interest.  The 
former  would  be  adopted  only  with  reluctance,  the  latter  ought 
not  to  be  allowed.’’ 

(e.)  The  Boston-Edison  Consolidation. 

Ten  years  later,  when  the  Board  of  Gas  and  Electric  Light 
Commissioners  had  occasion  to  comment  upon  the  consolida- 
tion of  the  Edison  and  Boston  companies  under  the  Act  of 
1901,  they  stated: — 

‘‘These  facts  mark  this  transaction  as  a noteworthy  instance 
of  the  consolidation  of  two  prosperous  companies  of  this  char- 
acter without  an  attempt  to  issue  new  stock  as  a mere  incident 
of  the  combination.” 

It  was  proposed  that  the  Edison  Electric  Illuminating  Com- 
pany should  buy  the  Boston  Electric  Light  Company.  When 
the  Legislature  came  to  authorize  the  consolidation,  it  pro- 
vided that  the  Edison  Company  should  issue  only  so  much  of 
its  stock  as  was  absolutely  necessary  to  acquire  upon  a valuation 
the  Boston  Company’s  stock;  and,  as  the  Boston  Company’s 
stock  was  of  less  value  than  the  Edison  stock,  the  result  of 
the  consolidation  was  an  actual  reduction  of  the  capitalization. 


Genioral  Legislation  Desirable. 

The  Massachusetts  State  Board  of  Trade  comes  here  to  urge 
the  passage  of  a general  act  governing  consolidation  of  gas  and 
electric  light  companies,  in  continued  performance  of  the  duty 
which  it  early  assumed  to  prevent  stock -watering  of  public 
service  corporations. 

To  the  efforts  of  the  Massachusetts  State  Board  of  Trade  is 
due  in  large  measure  the  passage  of  the  anti-stock-watering 
acts  of  1894,  which  embody  in  the  effective  form  of  a general 
law  the  policy  which  had  grown  to  be  recognized  as  a wise 
one  for  the  Commonwealth. 


6 


The  Massachusetts  State  Board  of  Trade  believes  that  to  the 
law  so  established  there  should  be  no  exceptions,  and  that  the 
interests  of  capital  as  well  as  of  the  public^  will  be  best  sub- 
served by  an  adherence  to  that  law  without  the  grant  of  favors 
or  special  privileges  to  any. 

In  connection  with  the  controversies  arising  out  of  the  Boston 
Gas  Companies  it  has  been  asserted  from  time  to  time  that 
the  attempt  to  enforce  against  these  companies  the  anti-stock 
watering  policy  of  the  Commonwealth  was  communistic  or 
socialistic. 

To  my  mind  nothing  can  be  farther  from  the  fact.  When 
Massachusetts  passed  the  anti-stock- watering  laws,  it  adopted 
a measure  of  a most  conservative  character, — a measure  more 
potent  for  the  protection  of  individual  private  property  than 
any  other  which  could  have  been  devised.  The  greatest  factors 
making  for  communism,  socialism,  or  anarchy  among  a free 
people,  are  the  excesses  of  capital;  because,  as  Lincoln  said  of 
slavery,  ‘‘Every  drop  of  blood  drawn  with  the  lash  shall  be 
requited  by  another  drawn  with  the  sword.’’  It  is  certain 
that  among  a free  people  every  excess  of  capital  must  in  time 
be  repaid  by  the  excessive  demands  of  those  who  have  not 
the  capital.  Every  act  of  injustice  on  the  part  of  the  rich 
will  be  met  by  another  act  or  many  acts  of  injustice  on  the 
part  of  the  people. 

If  the  capitalists  are  wise,  they  will  aid  us  in  the  effort  to 
prevent  injustice.  They  should  welcome  anti-stock-watering 
legislation  as  tending  to  protect  them  from  the  temptation  to 
do  injustice. 

Dangers  of  Special  Legislation. 

Hitherto  we  have  had  little  occasion  to  deal  with  this  matter 
of  consolidating  gas  companies  and  electric  lighting  companies, 
except  in  the  class  of  cases  acted  upon  by  the  Board  of  Gas  and 
Electric  Light  Commissioners,  to  which  I have  referred.  The 
only  class  of  cases  provided  for  by  the  existing  general  law  is 
where  gas  companies  seek  to  engage  in  the  electric  lighting  busi- 


7 


ness  and  the  law  empowers  the  Board  to  grant  such  permission 
after  public  hearing,  if  it  is  of  opinion  that  the  public  interest 
would  be  advanced  thereby. 

The  necessity  for  extending  the  scope  of  consolidation  has, 
however,  come.  It  is  believed  that  better  results  can  often 
be  attained  by  consolidating  under  one  management  several  gas 
companies  or  several  electric  light,  con^panies. 

Shall  we  undertake  to  meet  this  demand  by  the  passage  of 
special  acts,  and  subject  the  corr-rhimity  to'all  the 'dangers  and 
injustice  attendant  upon  special  legisiatio'h?  'Ot  ’shall  we  look 
over  the  field  of  the  law  as  it  exists  In  'MaisSactiusetts  and  see 
whether  we  have  not  now  in  Massachusetts  some  law  govern- 
ing the  consolidation  of  public  service  corporations  which  has 
been  tested  by  experience,  and  which  could  be  extended  to 
the  case  of  the  gas  and  electric  light  companies?  This  latter 
surely  is  what  we  should  do;  and,  if  we  but  look,  we  shall  find 
the  law  providing  for  the  consolidation  of  street  railway  com- 
panies which  may  serve  substantially  as  a model  for  the  consoli- 
dation of  gas  and  electric  light  companies. 

The  Street  Railway  Consolidation  Act  a Precedent. 

In  1898,  after  a most  careful  investigation  of  the  subject  by 
an  able  commission  appointed  to  deal  with  the  whole  subject, 
the  Legislature  passed  a law  which  provided  for  the  consolida- 
tion of  street  railway  companies  whose  lines  connected  with 
one  another,  subject  always  to  the  further  provision  that  in 
the  course  of  such  consolidation  there  should  be  no  increase 
in  the  amount  of  stock  issued,  that  there  should  be  no  reduc- 
tion in  the  facilities  afforded  the  public,  and  that  there  should 
be  no  increase  in  the  rates  charged  to  the  public,  and  that  the 
consolidation  should  appear  to  the  Railroad  Commissioners, 
after  public  hearing,  to  be  in  the  interest  of  the  community. 

That  law  almost  in  its  exact  wording  would  be  applicable 
to  the  present  gas  situation.  That  statute  could  be  applied  to 
gas  companies  and  to  electric  light  companies.  It  has  worked 


8 


well  for  nearly  seven  years  in  the  case  of  the  railway  companies. 
AVe  have  every  reason  to  believe  it  would  work  equally  well  in 
the  case  of  the  gas  and  electric  light  companies. 


Bos^roN 'Companip:s  should  not  be  Excepted. 

The  Boston  gas  companies  ask  to  be  excepted  from  the  gen- 
eral policy  (j)f  the  Comnmnwjealth  prohibiting  stock-watering 
in  the  consolidation  ^ of  pubuc  service  corporations.  AVhere 
will  such  a course  lead  you? 

If  an  exception  is  made  in  their  favor,  what  will  result? 
You  will  have  a cry  in  the  community  of  ‘‘special  privileges/’  of 
the  granting  to  some  people  what  you  deny  to  others.  And 
how  can  that  be  excused? 

There  is  only  one  safe  course  for  the  community,  only  one 
safe  course  for  you  and  for  us  who  want  property  rights  pro-  ' 
tected  and  preserved;  and  that  course  is  neither  to  seek  nor  to 
grant  special  privileges.  Let  us  all  stand  equal  before  the 
law,  and  let  the  law  be  so  just,  so  reasonable,  so  carefully  drawn, 
that  it  protects  alike  the  rights  of  all. 

Therefore,  when  it  comes  to  this  matter  of  consolidation, 
whether  it  be  of  the  AVorcester  companies  or  the  Boston  com- 
panies or  the  Haverhill  companies  or  any  other  companies, 
the  question  ought  to  be  always  one  and  the  same,  “What  is 
the  basis  on  which  companies  should  consolidate  in  Massachu- 
setts?” When  you  have  determined  what  the  proper  basis  is, 
apply  it  as  you  apply  every  law  under  which  we  live, — alike 
to  the  rich  and  the  poor,  alike  to  one  town  and  another  town, 
alike  to  every  part  of  the  Commonwealth. 

In  order  that  that  law  should  be  fair  in  its  operation  alike 
to  ail  concerned,  it  must  necessarily  be  applied  to  the  consoli- 
dation of  the  Boston  companies.  The  moment  that  you  make 
an  exception,  and  grant  special  privileges  to  one  set  of  men, 
you  create  a score  of  evils.  You  create  a feeling  of  unrest. 
You  lay  the  basis  for  a charge  of  favoritism  and  of  injustice. 
This  must  lead  to  the  charge  that  improper  means  have  been 


9 


used  to  accomplish  improper  ends.  It  is  almost  as  important 
to  legislation  as  it  is  to  the  administration  of  justice  in  the 
courts  that  it  should  not  only  be  pure  in  itself  and  just  in  itself,, 
but  that  the  public  should  recognize  that  it  is  so. 

The  Act  of  1903. 

It  may  be  said  the  Act  of  1903,  providing  for  the  consolida- 
tion of  the  Boston  companies,  was  passed  after  mature  consid- 
eration.  I dare  say  much  attention  was  given  to  some  of  its 
.provisions;  but  that  is  no  reason  for  permitting  it  to  stand,  if 
the  act  is  inconsistent  with  the  public  interest.  Consolidation 
has  not  yet  been  effected  under  that  act.  Fortunately,  we  can 
still  avoid  committing  a serious  mistake;  for  there  is  no  such 
thing  as  any  vested  right  in  that  law  any  more  than  in  any 
general  act  on  the  statute  books,  and  you  are  engaged  constantly 
in  modifying  and  repealing  general  acts. 

The  gentlemen  who  have  acquired  the  control  of  these  Boston 
Gas  Companies  had  the  control  of  them  before  they  applied  to 
the  Legislature  for  the  Act  of  1903.  It  was  because  they  had 
control  of  these  companies  that  they  applied  to  the  Legislature. 
Their  situation  has  been  in  no  way  changed  in  reliance  upon  the 
passage  of  the  act.  If  they  are  not  allowed  to  consolidate  on 
^ the  basis  of  twice  the  amount  of  capital  originally  invested,  they 
will  lose  nothing  more  than  the  improper  hope  which  was  en- 
tertained at  one  time.  They  will  lose  nothing  more  than  any 
of  us  lose  from  day  to  day  when  we  build  our  hopes  in  respect 
to  our  business  or  otherwise  upon  general  legislation  which  we 
think  would  prove  favorable  to  our  selfish  interests,  and  which 
the  Legislature  subsequently  modifies  in  the  interest  of  the  whole 
community.  No  right  has  been  acquired  by  the  Boston  Gas  Com- 
panies in  reliance  upon  the  Act  of  1903.  The  situation  of  these 
Boston  companies  has  not  been  changed  since  the  passage  of  the 
Act  of  1903.  Proceedings  have  been  instituted  looking  toward 
a consolidation,  and  a small  expense  has  been  incurred  in  em- 


10 


ploying  lawyers  and  experts  to  accomplish  that  purpose;  but 
that  is  all.  But,  even  if  some  action  had  been  taken  that  would 
not  prevent  your  legislating  properly  now;  for  every  act  of 
incorporation  in  this  Commonwealth  passed  for  over  seventy 
years  has  been  granted  subject  to  the  right  of  the  Legislature 
to  alter  and  repeal.  You  ought  not  to  hesitate  to  compel  the 
Boston  companies,  if  they  consolidate  at  all,  to  consolidate 
under  a general  law.  The  interests  of  the  Commonwealth  de- 
mand it;  and,  in  my  opinion,  the  interests  of  the  Gas  Com- 
panies in  the  long  run  demand  that  they  should  not  be  per- 
mitted to  do  an  act  which  the  community  will  believe  is  an 
^ct  of  injustice,  made  possible  through  a grant  of  special 
privileges. 

The  Massachusetts  Policy  not  Unfriendly  to  Capital. 

Representatives  of  the  financiers  say,  from  time  to  time, 
that  the  attitude  of  the  Massachusetts  Legislature  in  restrict- 
ing the  capitalization  and  privileges  of  public  service  corpora- 
tions prevents  investment  in  this  Commonwealth.  I believe 
that  statement  to  be  absolutely  unfounded  in  fact, — indeed, 
that  the  opposite  is  true ; and  here  is  the  proof : — 

Massachusetts  stands  among  the  States  practically  alone 
in  the  enviable  position  of  having  absolute  control  of  its  public 
service  corporations,  because  every  inch  of  pipe,  every  foot  of 
wire,  and  every  yard  of  track  in  the  public  streets  in  this 
Commonwealth  can  be  removed  at  any  time  when  the  public 
finds  it  to  be  for  its  interest  that  they  be  removed.  They  can 
be  removed  without  the  payment  of  a single  dollar  in  com- 
pensation to  the  companies  owning  them.  For  under  our 
law  the  community  gives  to  a public  service  company  not  a 
grant  of  a franchise,  but  merely  a revocable  license  to  lay 
tracks,  or  lay  pipes,  or  stretch  wires, — a license  to  continue 
so  long  as  in  the  opinion  of  the  properly  constituted  authori- 
ties of  the  community  it  is  for  the  public  interest.  With 
no  other  foundation  than  this  revocable  license,  and  the 


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-certainty  of  taxes  exceeding  per  cent,  upon  the  market 
value  of  the  stock,  hundreds  of  millions  of  dollars  have  been 
freely  invested  in  Massachusetts  public  service  corporations; 
but,  what  is  most  significant,  these  securities  stand  in  the 
stock  market  higher  in  character  than  the  securities  of  public 
service  corporations  of  other  States  where  the  franchise  rights 
are  granted  in  perpetuity.  For  instance,  stock  like  the  West 
End  Street  Railway  Company’s  is  selling  on  a basis  of  less 
than  4 per  cent,  return  to  the  investor, — a basis  as  favorable 
to  the  company  as  the  first  mortgage  bonds  of  the  greatest 
railway  companies,  as  favorable  as  the  bonds  of  many  of  the 
richest  cities  of  the  Union.  The  same  is  true  of  the  stock  of 
the  Edison  Electric  Illuminating  Company  of  Boston. 

The  circulars  of  the  bankers  and  brokers  offering  bonds  and 
stocks  of  public  service  corporations  of  other  States  generally 
end  with  the  statement  that,  in  the  ‘‘opinion  of  the  counsel, 
the  rights  and  privileges  are  perpetual,”  or  are  “for  long  terms 
of  years.”  We  have  nothing  of  that  sort  here  in  Massachu- 
setts; but  we  have  something  which  to  the  mind  of  the  average 
investor  is  proved  to  be  worth  even  more.  We  have  a system 
by  which  the  public  service  company  is  sure  of  its  rights  as  long 
as  it  deals  justly  with  the  community;  and  the  knowledge  that 
this  continued  existence  is  dependent  upon  the  good  will  of 
the  people  protects  the  companies  from  committing  arbitrary  or 
unjust  acts  which  would  incite  public  indignation  and  lead  to 
the  curtailment  or  destruction  of  their  rights.  Our  system  leads 
the  public  service  corporations  to  act  justly;  and  just  action 
thus  attained  insures  to  them  a continuation  of  their  privi- 
leges. 

The  conservative  classes  in  the  community  are  not  those 
who  wish  to  leave  unrestricted  the  power  of  wealth,  but  those 
who  in  economic  relations  are  working  for  justice  to  capitalist 
and  to  the  public  alike.  In  that  position  the  Massachusets 
State  Board  of  trade  stands.  In  that  spirit  the  Massachusetts 
State  Board  of  Trade  has  come  here  to  present  its  petition  for 
the  enactment  of  a general  law  providing  for  the  consolidation 


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of  gas  and  of  electric  lighting  companies  without  permitting 
as  a special  privilege  to  any  company  the  right  of  watering  it& 
stock. 

I say,  therefore,  gentlemen,  when  you  come  to  deal  with  this 
question,  deal  with  it  by  passing  a general  law  to  which  there 
is  no  exception. 


